This excerpt taken from the EYE 8-K filed Oct 9, 2008.
TO LOWER 2008 GUIDANCE
(SANTA ANA, CA), October 9, 2008 Advanced Medical Optics, Inc. (AMO) [NYSE: EYE] today lowered 2008 revenue guidance to a range of $1.17 billion to $1.20 billion and 2008 adjusted earnings-per-share (EPS) guidance to a range of $0.70 to $0.80. The company had previously forecasted a 2008 revenue range of $1.22 billion to $1.24 billion and a 2008 adjusted EPS range of $1.00 to $1.15.
The change in guidance reflects our view that deteriorating economic conditions are impacting our U.S. and European refractive procedure and system sales more significantly than we had previously anticipated, said Jim Mazzo, AMO chairman and chief executive officer. In addition, our revised guidance reflects slower-than-expected eye care sales for the balance of 2008.
Compared to the same period one year ago, AMOs third-quarter 2008 domestic excimer laser procedures declined about 37% and its domestic femtosecond procedures declined about 12%. Based on AMOs view that U.S. economic conditions will continue to weaken, the company now expects domestic excimer and femtosecond procedures to decline further in the fourth quarter. The company had previously expected its fourth-quarter U.S. excimer procedures to decline in the high 30% range and its U.S. femtosecond procedures to grow.
International expansion of our refractive business is an important AMO strategy and we continue to forecast double-digit revenue growth from international markets in 2008, Mazzo said. Our business remains strong in Japan and Asia Pacific. However, we began to experience more significant excimer and femtosecond procedure weakness in Europe during the third quarter as economic conditions worsened there. Our third-quarter refractive system sales were below expectations on a global basis and we expect this trend to continue in the fourth quarter, as well.
We also believe the soft economy is contributing to lower-than-expected eye care sales as consumers curtail spending and retailers reduce inventory levels. In addition, while our recent multipurpose market share trends are positive, eye care sales in Japan remain below our expectations and we are making management and operational changes to improve our performance in future periods.
Our cataract business, which is our largest and not generally economically sensitive, has continued to achieve strong growth in all geographies versus year-ago levels. We attribute this
to increased demand for our flagship cataract products, including the Tecnis® intraocular lens, White Star Signature phacoemulsification system and Healon® family of viscoelastics.
AMO will release its third-quarter results before the market opens on Friday, October 31. It provided the following preliminary view of the quarter:
We are in the midst of a very dynamic and challenging business environment and the AMO management team is fully focused on mitigating the downside risk while maximizing our long-term competitive strength, Mazzo continued. This includes building on the positive momentum in our cataract business on a global basis, allocating resources within our refractive business to extend our technological and market leadership, and taking proactive steps to spur eye care sales growth and market share gains. Moreover, we remain vigilant in our effort to enhance efficiency and lower costs, while improving cash flows in order to reduce debt and strengthen our balance sheet.